SB110 Alabama 2015 Session

Summary

Primary Sponsor

Arthur OrrSenator

Republican

Session

Regular Session 2015

Title

Payday loans, deferred presentment services, expand licensure requirements, further regulate deferred presentment services, penalties for evading licensure requirements, Secs. 5-18A-3, 5-18A-12, 5-18A-13 am'd.

Summary

SB110 would expand and tighten regulation of deferred presentment services (payday loans) in Alabama by broadening licensing, raising fees, and adding penalties for evading licensure while setting specific loan and fee limits.

What This Bill Does

It expands licensure to cover services offered by mail, telephone, Internet, mobile device applications, or in person and requires a separate license for each location. It increases the nonrefundable license fee and directs half of the increase to the State Banking Department and half to the General Fund, plus an application investigation fee. It makes it a criminal offense to evade licensure and establishes penalties. It tightens rules on loan fees, interest, number of loans, loan term, and repayment, including disclosure requirements and renewal/refinancing limits.

Who It Affects

• Deferred presentment service providers (payday lenders) must obtain licenses for all channels and locations, follow stricter rules, and face higher fees and potential penalties for evasion.
• Consumers who use deferred presentment services will experience tighter loan terms and costs and will receive clearer disclosures about fees and options.

Key Provisions

• Expanded licensure to include mail, telephone, Internet, mobile app, and in-person deferred presentment services; separate license required for each location.
• License fees increased: $500 per location for the license, $500 per location to the General Fund, plus a $100 application investigation fee; supervisor may raise these fees.
• Criminal penalties for evading licensure; misdemeanor with fines up to $500, imprisonment up to 6 months, or both.
• Loan terms and charges regulated: maximum $500 advanced; maximum 45% annual finance charge; origination fee up to 20% of the first $300 plus 7.5% of any amount over $300; monthly maintenance fee up to $7.50 per $100 loaned; all fees included in APR disclosures; renewal limits (maximum two successive loans with the same customer) and refinancing rules; prepayment refunds required when applicable.
• Disclosure and compliance requirements: clear, written disclosures of all fees and costs; conspicuous fee schedule display; endorsement of checks; prohibition on deceptive practices; use of third-party database to verify outstanding loans; and other consumer protections.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Banks and Banking